2017 has begun, so has the time to plan your life to make your future a comfortable one. But resolutions are easy to make and easier still to break. Not financial resolutions though, especially if you are planning to make a big commitment in the form of a Home Loan.
Home Loans are an easy way to fund your dream home. However, Home Loan repayment can take a lot of your time and as well as test you on your financial planning skills.
Many people find it easy to keep borrowing without giving a caring about their CIBIL score or even the current status of their finances. This can generally deplete your finances and put you at a high risk over a period of time.
Banks tend to avoid lending money to someone with a low credit or CIBIL score than to those who have been regular with their Home Loan Repayment. Your financial credibility can also determine your eligibility for a Top up Loan or a Home Loan Transfer.
Here are a few financial resolutions you can take up in 2017 to get closer to owning your dream home without getting in a financial mess.
- Assess Your Financial Status
If you are a fixed income earner, then you should do an honest reassessment of your finances alongside your long term financial goals.
Your savings should be more than your expenditures and you should have enough to sustain your Home Loan repayment in case of a shortfall.
This also helps in case you are looking for a Top up Loan from your bank. If your CIBIL score is good and your finances are stable, any bank would be happy to provide you with an additional loan.
- Choose Appropriate Home Loan Interest Rates
There are two kinds of Home Loan interest rates provided by the banks, fixed and floating rate.
Fixed interest rates Home Loan include a static rate of interest for the tenure of the Home Loan. Floating interest rates for Home Loan repayment includes you paying interest based on the market conditions, which means the amounts that you pay vary during the tenure of the loan.
You may have to pay pre-payment penalty charges in case you have a fixed interest Home Loan that you decide to pay off early. However, floating interest Home Loan is exempted from such penalty.
- Strategize your EMIs
The EMI that is predetermined at the beginning of your Home Loan can actually work in both negative and positive ways. When your credit score is good, you can easily avail another loan over and above your existing loan.
This is known as Top up Loan and can be taken if you have almost cleared the EMI for your existing Home Loan as banks look at it as your credibility, when your previous debts are met on time.
This might seem like a lot to handle, but it doesn’t have to be that way. You can keep your finances in order and ensure that you don’t have to worry about economic stability for your future. All you really have to do is ensure that you make an accurate map of what you can do and what you need to improve on. This new year, if you stick to the Financial Resolutions mentioned above, then you are surely going to be more financially wiser and sound.